Blog

Will approach the government with a charter of demands to ensure the protection of over 150K mobile phone retailers: AIMRA

The situation is extremely fragile…Several shops are closed and retailers are even taking extreme steps such as suicide: AIMRA

Ecommerce platforms sold 81 Mn of the 161 Mn smartphones sold in India in 2021.This was mostly led by heavy marketing and initiatives such as financing and cash back schemes

Amping up the attack on ecommerce players, a mobile retailers’ body on Friday sought government intervention against the ‘unethical and monopolistic business practices’ of online sales platforms.

The All India Mobile Retailers Association (AIMRA) alleged that the monopolistic practices of ecommerce firms were jeopardising the future of more than 1.5 Lakh smartphone retailers across the country.

In a statement, AIMRA said, “The situation is extremely fragile due to the unethical, discriminatory, and monopolistic business practices by online sales platforms. Several shops are closed and now retailers are even taking extreme steps such as suicide.”

The retailers’ body also sought safeguards from the government against the ecommerce players. An AIMRA office bearer said, “We will approach the government with a charter of demands to ensure the protection of over 150K mobile phone retailers across the country who are struggling to compete with the tech giants and unethical business practices by many online sales channels and portals.”

Lashing out at ecommerce platforms, another AIMRA member also claimed that a new discriminatory environment had emerged in India, adding that that big players (referring to ecommerce firms) were flouting norms with impunity, thereby, threatening small retailers. 

The body also said that the survival of small retailers was at stake, and added that it was high time that the government stepped in to ensure transparency in business operations of these big players.

The latest development came ahead of a two-day Annual General Meeting (AGM) of the body scheduled in Kolkata from April 16 to chart out a counter-strategy to deal with the onslaught of ecommerce portals.Hundreds of retailers across the country have converged in the city to attend the AGM.

The  move also came a day after industry body Confederation of Indian Traders (CAIT) wrote a letter to Finance Minister Nirmala Sitharaman, seeking investigation into the alleged predatory pricing tactics of Flipkart-owned Shopsy.

The trade bodies have repeatedly accused ecommerce portals of monopolising business.

Time and again, both sides have sparred over the matter and, in many cases, the trade bodies have even sought investigation into players such as Amazon and Flipkart. 

Earlier  in January this year, CAIT had moved the Competition Commission of India (CCI) against ecommerce player Shopee, accusing it of predatory pricing. Interestingly, Shopee late last month wound up its India operations, citing ‘market uncertainty.’

In February, CAIT had also invited more than 150 national level business associations to join its fight against the alleged business malpractices of ecommerce players.

Overall, India is one of the biggest and fastest growing mobile phone markets in the world. According to a report by IDC, India shipped more than 161 Mn smartphones in 2021, registering a 7% year-on-year (YoY) increase. This was despite COVID-19 second wave disrupting supply chains, leading to lower inventories. 

Of this, ecommerce platforms sold as many as 81 Mn smartphones, registering a steep 13% YoY growth, surpassing the offline channel. This was mostly led by heavy marketing and initiatives such as financing and cash back schemes offered by online portals.

Chinese smartphone manufacturer Xiaomi, led the market share in 2021. It contributed more than 25.1% of shipment volumes last year. South Korean giant Samsung stood at second spot with 17.4% of shipment volumes, followed by Vivo which grabbed 15.6% of the total market share.